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1 Issue: July 2018 Vol. 7 No. 1 BMC Advisors Corporate Laws and Intellectual Property Rights Consultants MCA Update SEBI Update RBI Update Income Tax Update IPR Update Service Tax Excise Update Custom Update GST Update DGFT Update 1

2 WEEKLY UPDATES JUNE 25 th, JULY 01 st,

3 INDEX SEBI UPDATE Filing of Term Sheet by Angel Funds 4-8 EXCISE UPDATE Non-initiation/Delay in recovery proceedings -Audit Report no. 3 of 2017 and Audit Report no. 41 of 2016 of C&AG of India (Indirect Taxes - Central Excise and ST) reg CUSTOM UPDATE Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver- Reg GST UPDATE Seeks to exempt payment of tax under section 9(4) of the CGST Act, 2017 till Seeks to exempt payment of tax under section 5(4) of the IGST Act, 2017 till Seeks to exempt payment of tax under section 7(4) of the UT GST Act, 2017 till

4 SEBI UPDATES CIRCULAR CIR/IMD/DFI/ 102 /2018 All Registered Alterative Investment Funds June 29, 2018 Dear Sir/ Madam, Sub.: Filing of Term Sheet by Angel Funds. 1. In order to provide ease of doing business to Angel Funds, SEBI had formed a working group to study SEBI (Alternative Investment Funds) Regulations, 2012 (hereinafter referred to as 'AIF regulations') and suggest changes required, if any. Based on the recommendations of the working group, SEBI has amended the AIF Regulations vide notification dated June 1, 2018 (copy of the notification enclosed as Annexure I), simplifying certain regulatory provisions regarding the Angel Fund including Regulation 19(E) which deals with filing of scheme details with SEBI. 2. Pursuant to the aforesaid amendment of AIF regulations, it is specified that: 2.1 angel funds may now launch schemes subject to filing of a Term Sheet in the format as specified in Annexure II; 2.2 such Term Sheet shall contain material information regarding the scheme; and 2.3 such Term Sheet shall be filed with the Board within ten days of launching the scheme. 3. This circular is issued in exercise of powers conferred by sub-section (1) of section 11 and section 11A of the Securities and Exchange Board of India Act, 1992 read with the provisions of the AIF regulations, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. The provisions of this circular shall be applicable with immediate effect. 4. This Circular is available on SEBI website at under the categories Legal Framework-Circulars and Info for Alternative Investment Funds Yours faithfully, Naveen Sharma Deputy General Manager Investment Management Department Tel No Id - naveens@sebi.gov.in 4

5 Annexure I THE GAZETTE OF INDIA EXTRAORDINARY PART -III - SECTION 4 PUBLISHED BY AUTHORITY NEW DELHI, JUNE 01, 2018 SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION Mumbai, the 31 st of May, 2018 SECURITIES AND EXCHANGE BOARD OF INDIA (ALTERNATIVE INVESTMENT FUNDS) (AMENDMENT) REGULATIONS, 2018 No. SEBI/LAD-NRO/GN/2018/19.- In exercise of the powers conferred by sub-section (1) of section 30 read with sub-section (1) of section 11, clause (ba) and clause (c) of subsection (2) of section 11 and subsections (1) and (1B) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, namely,- 1. These regulations may be called the Securities and Exchange Board of India (Alterative Investment Funds) (Amendment) Regulations, They shall come into force on the date of their publication in the Official Gazette. 3. In the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012,- (a) in regulation 2, in sub-regulation (1),- (a) in clause (b), 1. in proviso, in clause (i), the words "Companies Act, 1956" shall be substituted with the words "Companies Act, 2013". 2. in proviso, the existing clause (ii) shall be substituted with the following clause, namely,- "(ii) ESOP Trusts set up under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 or as permitted under Companies Act, 2013;" 3. in proviso, the existing clause (iv) shall be substituted with the following clause, namely,- "(iv) 'holding companies' as defined under sub-section 46 of section 2 of Companies Act, 2013" (b) in clause (g), the words "Companies Act, 1956" shall be substituted with the words "Companies Act, 2013" (c) in clause (u), the existing sub-clause (iii) shall be substituted with the following sub-clause, namely;- "(iii) company registered under section 8 of the Companies Act, 2013" 5

6 (ii) in regulation 2, in sub-regulation (2), the words "Companies Act, 1956 (1 of 1956)" shall be substituted with the words "Companies Act, 2013 (18 of 2013)" (iii) in regulation 10, in clause (f), in the proviso, the words "Companies Act, 1956" shall be substituted with the words "Companies Act, 2013". (iv) in regulation 19A, in sub-regulation (3), in clause (a), in Explanation I, the words "section 6 of the Companies Act, 1956 (1 of 1956)" shall be substituted with the words "sub-section 77 of section 2 of the Companies Act, 2013". (v) in regulation 19D, in sub-regulation (2), the word "ten" shall be substituted with the word "five". (vi) in regulation 19D, in sub-regulation (3), the word 'three" shall be substituted with the word "five". (vii) in regulation 19D, in sub-regulation (4), the following proviso shall be inserted, namely,- "Provided that the provisions of the Companies Act, 2013 shall apply to the Angel Fund, if it is formed as a company." (viii) in regulation 19E,- (a) sub-regulation (1) shall be substituted with the following, namely,- The angel fund may launch schemes subject to filing of a term sheet with the Board, containing material information regarding the scheme, in the format and time period as specified by SEBI. (b) sub-regulation (2) and (3) shall be omitted. (c) existing sub-regulation (4) shall be renumbered as sub- regulation (2). (d) in Sub-regulation (2), the following proviso shall be inserted, namely, Provided that the provisions of the Companies Act, 2013shall apply to the Angel Fund, if it is formed as a Company (ix) in regulation 19F, in sub-regulation (2), the words five crores shall be substituted with the words ten Crores (x) in regulation 29, in sub-regulation (3), the words Companies Act, 1956 (1 of 1956) shall be substituted with the words Companies Act, 2013 Footnote: Sd/- AJAY TYAGI CHAIRMAN THE SECURITIES AND EXCHANGE BOARD OF INDIA 1. The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 were published in the Gazette of India on 21 st May, 2012 vide No. LAD-NRO/GN/ /04/ The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 were subsequently amended on: 6

7 a. 16 th September, 2013 by Securities and Exchange Board of India (Alterative Investment Funds) (Amendment) Regulations, 2013 vide No. LAD-NRO/GN/ /24/6573. b. 23 rd May, 2014 by Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2014 vide No. LAD-NRO/GN/ /03/1089. c. 26 th September, 2014 by Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 vide No. LADNRO/GN/ /11/1576. d. 14 th August, 2015 by Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2015 vide No. SEBI/LAD-NRO/GN/ /011. e. 4 th January, 2017 by Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2016 vide No. SEB/LAD/NRO/GN/ /026. f. 6 th March, 2017 by Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017 vide No. SEBI/LAD/NRO/GN/ /037. Term Sheet Annexure II A- Investment and Investee Company Related Information Name of the Angel Fund SEBI Registration No. Name of Scheme Name of Investee Company Investee Company profile and Product details/ services offered by the investee company Business / Industry details of the investee Company Present Investment size/ Amount of the offering Investment Highlights Total Capital Commitment by Investors Capital drawn by the fund Type of Securities (Equity Shares / Compulsory Convertible Preference Shares / Compulsorily Convertible Debentures) Number of securities along with description Price per share/ unit of the security Conversion Price and terms, in case convertible securities Details of lock in for share/ unit of fund Co-investment, if any Details of Valuation of investee company Fee and expenses details for the fund Exit strategy for the Angel Fund- Termination of the investment / exit provisions Distribuation waterfall (distribution to the investors) Exit/ transfer rights for investors 7

8 B- Compliance with SEBI (Alternative Investment Fund) Regulations List of Investors in the scheme and compliance with AIF regulations in this regard in detail {Regulation 19D(1)} Whether the fund for a corpus of at least 5 crore rupees Details of compliance of Regulation 19D (3) Whether funds have been raised private placement by issue of information memorandum or placement memorandum Details of compliance of Regulation 19 (F) (1) Investment by an angel fund in any venture capital undertaking shall not be less than twenty five lakh rupees and shall not exceed ten crore rupees Details of Compliance od Regulation 19 (F) (3) Details of investment made in associates (as % of total investments), if any. Also provide reasons for such investments Whether investments of the Angel fund is more than twenty-five per cent of the total investment under all its schemes in one venture capital undertaking. If yes, provide detailed explanation Conditions or guidelines stipulated / issues by the Reserve Bank of India and the Board have been complied with, in case of investment in the securities of companies incorporated outside India A declaration from sponsor w.r.t the angel investors satisfying the conditions specified in sub-regulation (2) of regulation 19A A declaration that the manager/ sponsor have a continuing interest in the angel fund of not less than two and half percent of the corpus or fifty lakh rupees, whichever is lesser, and such interest is not through the waiver of management fees. {Regulation 19G(2)} Whether undertaking received from every angel investor confirming approval for investment, prior to making such investment {Regulation 19G(3)} C- Material changes Angel Fund shall submit details of material changes from the last PPM/ Term Sheet in the following tabular format : Provisions in the PPM / last Term sheet Material change Rationale for change Date of intimation to SEBI / date of approval from SEBI 8

9 Circular No. 1066/5/2018-CX EXCISE UPDATES F.No. 298/05/2017- CX9 Government of India Ministry of Finance Department of Finance Central Board of Indirect Taxes and Customs To, Principal Chief Commissioner/ Chief Commissioners of CX & GST/Customs (All), Principal Directors General/ Directors General of CBIC (All). Room No. 267-D, North Block, New Delhi, dated Subject: Non- Initiation/ Delay in Recovery Proceedings- Audit Report No. 3 of 2017 and Audit Report No. 41 of 2016 of C&AG of India (Indirect Taxes- Central Excise and Service Tax) - regarding. The undersigned is directed to refer the Circular No. 365/81/1997-CX, dated , wherein it was directed that a special cell, namely Recovery Cell should be created in each Commissionerate headed by a Dy./ Assistant Commissioner who will be designated as the Authorised Officer, for the purpose of making recovery of Government dues in terms of Section 11 of Central Excise Act, 1944 read with Section 142 of the Customs Act, 1962 and the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, Attention is also invited to the Board s Circular No. 1062/2017- CX dated , issued on the aforesaid subject. 2. In this context, it is noted that field formations are not following uniform practice. Some Commissionerates have no Recovery Cell at Hqrs, and where such Recovery Cells have been constituted, most of them are acting as mere monitoring cells. Only a few are discharging the duties as envisaged in the Circular No. 365/81/1997- CX, dated In View of the above, it is reiterated that all Commissionerates should constitute a Recovery Cell as laid down in the aforesaid Circular, and only those cases where recovery is not made by Departmental efforts and action needs to be taken for recovery by attachment and sale of property of the defaulter, as laid down in section 142 of the Customs Act, 1962, should be transferred to Recovery Cell. All other cases of recovery of arrears will be dealt with by concerned jurisdictional officers only. 4. The standard operating procedure to be followed is as follows:- Where the Government dues have not been paid by any person and the recovery is to be done under Section 142 of Customs Act, 1962 & Rules there under, the Dy./ Assistant Commissioner of GST & Central Excise/ Customs should prepare a certificate under Rule-3 in the prescribed format, clearly mentioning the amount due from the such persons, and send the same to Pr. Commissioner/ Commissioner of GST & Central Excise/ Customs having jurisdiction over the place in which such persons owns any movable or immovable property or resides or carries on his own business or has his bank accounts The Pr. Commissioner/ Commissioner of GST & Central Excise or the Pr. Commissioner/ Commissioner of Customs, as the case may be, will direct the concerned Authorised Officer to cause a notice, in the prescribed format, to be served upon such person requiring to pay the amount specified in the certificate within 7 days of the notice. The Authorised officer should thereafter take steps to realize the amount mentioned in the certificate in terms of the said rules after expiry of the stipulated period of 7 days. 9

10 4.2 If the amount mentioned in the certificate is not paid within 7 days the date of service of notice, the Authorised Officer should proceed to realize the amount by attachment and sale of the defaulter s property, in accordance with the procedure of attachment and proclamation and sale as prescribed manner. 5. Keeping in view the seriousness of the matter, the Board feels that more emphasis and better monitoring of tax arrears recovery is required at the Zone and Commissionerate level. The Zonal Chief Commissioners are hereby directed to closely look into the matter and take necessary steps to revamp the Recovery cells. Action may also be taken to review and monitor the tax arrears cases and expeditious action taken towards their liquidation. The Recovery or arrears should be properly reflected in the Monthly Performance Reports (MPRs) on the DDM portal ( 6. All zonal Pr Chief/ Chief Commissioners should ensure that the Recovery Cells are augmented with adequate manpower so that immediate action can be initiated on receipt of such cases for recovery. The performance of the Department in recovery of arrears has been adversely commented by the C&AG. Hence it is once again directed that these issues may be addressed in a serious and prompt manner as envisaged in the Circular. Non- compliance of the above directions will be viewed seriously. Copy to:- Yours Faithfully, (V. Ganesh Kumar) Under Secretary to the Govt. of India (i) (ii) (iii) (iv) (v) Chairman & Members, CBIC All Joint Secretaries/Commissioners (CBIC) Commissioner (Tax Arrear Recovery), DGPM, C.R. Building, New Delhi. Commissioner (PAC), Hudco Vishal Building, Bhikaji Kama Place, New Delhi. Webmaster with request to upload on CBIC website. 10

11 CUSTOM UPDATES [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART-II, SECTION-3, SUB- SECTION (ii)] Government of India Ministry of Finance (Department of Revenue) (Central Board of Indirect Taxes and Customs) Notification No. 58/2018-CUSTOMS (N.T.) New Delhi, 29 th June, Ashadha, 1940 (SAKA) S.O. (E). In exercise of the powers conferred by sub-section (2) of section 14 of the Customs Act, 1962 (52 of 1962), the Central Board of Indirect Taxes & Customs, being satisfied that it is necessary and expedient so to do, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 36/2001-Customs (N.T.), dated the 3 rd August, 2001, published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide number S. O. 748 (E), dated the 3 rd August, 2001, namely:- In the said notification, for TABLE-1, TABLE-2, and TABLE-3 the following Tables shall be substituted, namely: - TABLE-1 Sl. No. Chapter/ heading/ sub-heading/tariff item Description of goods Tariff value (US $Per Metric Tonne) (1) (2) (3) (4) Crude Palm Oil RBD Palm Oil Others Palm Oil Crude Palmolein RBD Palmolein Others Palmolein Crude Soya bean Oil Brass Scrap (all grades) Poppy seeds 2531 TABLE-2 Sl. No. Chapter/ heading/ subheading/tariff item Description of goods Tariff value (US $) (1) (2) (3) (4) 1 71 or 98 Gold, in any form, in respect of which the benefit of entries at serial number 356 and 358 of the Notification No. 50/2017-Customs dated is availed 403 per 10 grams 2 71 or 98 Silver, in any form, in respect of which the benefit of entries at serial number 357 and 359 of the Notification No. 50/2017-Customs dated is availed 519 per kilogram 11

12 Sl. No. Chapter/ heading/ sub-heading/tariff item TABLE-3 Description of goods Tariff value (US $ Per Metric Tonne) (1) (2) (3) (4) Areca nuts 3947 [F. No. 467/01/2018 -Cus-V] (Dr. Sreeparvathy S.L.) Under Secretary to the Govt. of India Note: - The principal notification was published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide Notification No. 36/2001 Customs (N.T.), dated the 3 rd August, 2001, vide number S. O. 748 (E), dated the 3 rd August, 2001 and was last amended vide Notification No. 53/2018-Customs (N.T.), dated the 14 th June, 2018, e-published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide number S. O. 2425(E), dated 14 th June,

13 GST UPDATES [To be published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i)] Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs Notification No. 12/2018 Central Tax (Rate) New Delhi, the 29 th June, 2018 G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 8/2017 Central Tax (Rate), dated the 28 th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 680 (E), dated the 28 th June, 2017, and last amended vide notification No. 10/2018-Central Tax (Rate), dated the 23 rd March, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), vide number G.S.R. 269 (E), dated the 23 rd March, 2018, namely:- In the said notification, for the figures, letters and words 30th day of June, 2018, the figures, letters and words 30 th day of September, 2018 shall be substituted. [F. No. 349/58/2017-GST (Pt.)] (Dr. Sreeparvathy S.L) Under Secretary to the Government of India Note: - The principal notification No. 8/2017-Central Tax (Rate), dated the 28 th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i) vide number G.S.R. 680 (E), dated the 28 th June, 2017 and last amended vide notification No. 10/2018 Central Tax (Rate), dated the 23 rd March, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 269 (E), dated the 23 rd March,

14 [To be published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i)] Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs Notification No.13/2018 Integrated Tax (Rate) New Delhi, the 29 th June, 2018 G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 6 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 32/2017- Integrated Tax (Rate), dated the 13 th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R (E), dated the 13 th October, 2017, and last amended vide notification No. 11/2018-Integrated Tax (Rate), dated the 23 rd March, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 270 (E), dated the 23 rd March, 2018, namely:- In the said notification, in paragraph 2, for the figures, letters and words 30 th day of June, 2018, the figures, letters and words 30 th day of September, 2018 shall be substituted. [F. No. 349/58/2017-GST (Pt.)] (Dr. Sreeparvathy S.L) Under Secretary to the Government of India Note: - The principal notification No. 32/2017- Integrated Tax (Rate), dated the 13 th October, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R (E), dated the 13 th October, 2017 and last amended vide notification No. 11/2018-Integrated Tax (Rate), dated the 23 rd March, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 270 (E), dated the 23 rd March,

15 [To be published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i)] Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs Notification No. 12/2018 Union Territory Tax (Rate) New Delhi, the 29th June, 2018 G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 8 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 8/2017 Union Territory Tax (Rate), dated the 28 th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 717 (E), dated the 28 th June, 2017, and last amended vide notification No. 10/2018- Union Territory Tax (Rate), dated the 23 rd March, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 271 (E), dated the 23 rd March, 2018, namely:- In the said notification, for the figures, letters and words 30 th day of June, 2018, the figures, letters and words 30 th day of September, 2018 shall be substituted. [F. No. 349/58/2017-GST (Pt.)] (Dr. Sreeparvathy S.L) Under Secretary to the Government of India Note: - The principal notification No. 8/2017-Union Territory Tax (Rate), dated the 28 th June,2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i) vide number G.S.R. 717 (E), dated the 28 th June, 2017 and last amended vide 10/2018- Union Territory Tax (Rate), dated the 23 rd March, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 271 (E), dated the 23 rd March,

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